Luna Innovations Incorporated today announced its financial results for the first quarter ended March 31, 2011.
As compared to the same quarter last year, product and license revenue increased by 63%, from $2.1 million in the first quarter of 2010 to $3.4 million in the first quarter of 2011, while total revenue increased by 14%, from $7.9 million in the first quarter of 2010 to $9.0 million in the first quarter of 2011. Gross profit increased from $2.8 million for the first quarter of 2010 to $3.3 million for the first quarter of 2011. The company reported a net loss attributable to common stockholders of $1.1 million, or $0.08 per common share, for the first quarter of 2011, as compared to a net loss attributable to common stockholders of $1.3 million, or $0.10 per common share for the first quarter of 2010. Adjusted EBITDA, which is earnings before interest, taxes, depreciation and amortization, excluding non-cash stock-based compensation and warrant expense and charges related to the company’s litigation with Hansen Medical, Inc. and its Chapter 11 reorganization, from which the company emerged in January 2010, decreased to $0.3 million for the first quarter of 2011, as compared to $0.5 million for the first quarter of 2010. Cash increased to $7.5 million at March 31, 2011 compared to $7.2 million at December 31, 2010.
My Chung, chief executive officer, provided this overview of Luna’s results: “I am excited to have joined Luna at this important time of growth. The revenue growth in the first quarter demonstrates a continued increase in demand for our fiber optic equipment and our related technologies. Our focus on expense control has allowed us to translate our revenue growth into improvement in our bottom line and achieving our third consecutive quarter of positive cash flow.”
First Quarter Financial and Business Highlights
- Total revenues increased by 14%, from $7.9 million in the first quarter of 2010 to $9.0 million in the first quarter of 2011.
- Product and license revenue increased by 63%, from $2.1 million in the first quarter of 2010 to $3.4 million in the first quarter of 2011. Technology development revenues decreased by 3%, to $5.6 million, for the first quarter of 2011 from $5.8 million for the first quarter of 2010.
- Gross profit for the first quarter of 2011 increased to $3.3 million, or 37% of total revenues, from $2.8 million, or 36% of total revenues, for the corresponding period of 2010.
- Selling, general and administrative expenses increased by 9% to $3.7 million, or 41% of total revenues for the first quarter of 2011, from $3.4 million, or 43% of total revenues, for the first quarter of 2010. Expenses for the first quarter of 2011 include approximately $0.3 million in non-recurring charges related to the acceleration of expense recognized in conjunction with the company’s consulting agreement with its former chief executive officer and the costs associated with a potential proxy contest.
- Total operating expenses increased to $4.2 million, or 47% of total revenues, for the first quarter of 2011 from $3.9 million, or 50% of total revenues for the first quarter of 2010.
- Adjusted EBITDA, which excludes litigation and reorganization related items, decreased to $0.3 million in the first quarter 2011 from $0.5 million in the first quarter of 2010.
- Net loss attributable to common stockholders improved to $1.1 million for the first quarter of 2011 compared to a net loss attributable to common stockholders of $1.3 million for the first quarter of 2010.
- Achieved third consecutive quarter of positive cash flow. Cash and cash equivalents totaled $7.5 million at March 31, 2011 as compared to $7.2 million at December 31, 2010.
- Luna extended its development and supply agreement with Intuitive Surgical, under which Luna is enhancing its fiber optic shape sensing technology for potential incorporation into Intuitive’s products.
- Received orders in the first quarter of 2011 for approximately $2.9 million in test and measurement products compared to $1.2 million in the same quarter of 2010, representing a 142% increase.
Based on information as of May 10, 2011, the company continues to expect total revenue for 2011 to be in the range of $37.0 million to $39.0 million, consisting of product and license revenue of $14.0 million to $15.0 million and technology development revenue of $23.0 to $24.0 million. Also for 2011, the company anticipates a net loss to common stockholders in the range of $2.0 million to $2.5 million. For the second quarter of 2011, the company expects revenue of approximately $9.0 million to $10.0 million and a net loss attributable to common stockholders of approximately $0.3 million to $0.6 million.
In evaluating the operating performance of its business, Luna’s management excludes certain charges and credits that are required by generally accepted accounting principles (“GAAP”). These non-GAAP results provide useful information to both management and investors by excluding items that the company believes may not be indicative of its operating performance, because either they are unusual and the company does not expect them to recur in the ordinary course of its business or they are unrelated to the ongoing operation of the business in the ordinary course. These non-GAAP measures should be considered in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.
Conference Call Information
As previously announced, Luna Innovations will conduct an investor conference call at 5:00 p.m. (EDT) today to discuss its financial results and business developments for the first quarter of 2011 and expectations for the remainder of 2011. The call can be accessed by dialing 866.770.7125 domestically or 617.213.8066 internationally prior to the start of the call. The participant access code is 97397780. Investors are advised to dial in at least five minutes prior to the call to register. The conference call will also be webcast live over the Internet. The webcast can be accessed by logging on to the “Investor Relations” section of the Luna Innovations website, http://www.lunainnovations.com, prior to the event. The webcast will be archived under the “Webcasts and Presentations” section of the Luna Innovations website for at least 30 days following the conference call.
Luna Innovations Incorporated (http://www.lunainnovations.com) is focused on sensing and instrumentation. Luna develops and manufactures new-generation products for the healthcare, telecommunications, energy and defense markets. The company’s products are used to measure, monitor, protect and improve critical processes in the markets we serve. Through its disciplined commercialization business model, Luna has become a recognized leader in transitioning science to solutions. Luna is headquartered in Roanoke, Virginia.